G.R. No. 224936, September 04, 2019
PNOC ALTERNATIVE FUELS CORPORATION, PETITIONER, VS. NATIONAL GRID CORPORATION OF THE PHILIPPINES, RESPONDENT.

FACTS

Respondent National Grid Corporation of the Philippines (NGCP) filed a Complaint for Expropriation against petitioner PNOC Alternative Fuels Corporation (PAFC) and others to acquire a portion of land (101,290.42 sq. m.) within the Petrochemical Industrial Park in Bataan for its Mariveles-Limay 230 kV Transmission Line Project. NGCP, franchised under Republic Act No. 9511, invoked its delegated power of eminent domain after failed negotiations. The subject property originated from public domain land reserved for various public purposes through a series of laws: Executive Order No. 48 (1919) for a horticultural station; Presidential Proclamation No. 361 (1968), amended by P.P. No. 630 (1969), reserving it for an industrial estate; Presidential Decree No. 949 (1976) transferring administration and ownership to the Philippine National Oil Company (PNOC) to develop it as a petrochemical industrial zone; and P.D. No. 1803 (1981) enlarging the zone. Petitioner PAFC, a PNOC subsidiary, was incorporated to administer the zone and was assigned ownership of the property. In 2013, Republic Act No. 10516 was passed, expanding the park’s use to include energy-related projects. PAFC opposed the expropriation, arguing the land was already devoted to a public purpose (petrochemical industries essential to national interest) and that only Congress could exercise eminent domain over it. The Regional Trial Court (RTC) issued an Order of Expropriation, ruling NGCP had a lawful right to expropriate upon payment of just compensation, holding that property already devoted to public use can still be expropriated provided it is done by the national legislature or under a specific grant of authority to a delegate, which NGCP possessed under R.A. No. 9511. PAFC’s motion for reconsideration was denied.

ISSUE

1. Whether petitioner PAFC was correct in filing its Rule 45 Petition directly before the Supreme Court.
2. Whether the RTC was correct in issuing the assailed Order of Expropriation, which held that respondent NGCP is empowered to expropriate the subject property under R.A. No. 9511.

RULING

1. On the Propriety of the Direct Appeal: The Supreme Court found the direct recourse via Rule 45 proper. An order of expropriation that finally disposes of the issue of the plaintiff’s right to expropriate and leaves only the determination of just compensation is a final order that may be appealed. The RTC’s Order of Expropriation, which overruled all objections and defenses against NGCP’s right to expropriate, was a final determination on the issue of the right to expropriate, appealable under Rule 41. Since the appeal purely raised questions of law, the petition filed under Rule 45 was appropriate.
2. On the Right to Expropriate: The Supreme Court REVERSED and SET ASIDE the RTC’s Orders. It held that NGCP could not expropriate the subject property.
* Property Already Devoted to Public Use: The Court ruled that property already devoted to public use cannot be expropriated for another public purpose by a delegate of Congress, such as NGCP, absent a specific and express grant of authority to do so. The power must be expressly granted by law or necessarily implied from the powers conferred. The subject property, as part of the Petrochemical Industrial Park established by law (P.D. No. 949, as amended by R.A. No. 10516) for a specific public purpose (petrochemical, energy, and related industries essential to national interest), is property for public use.
* NGCP’s Franchise Limitation: Section 4 of R.A. No. 9511 authorizes NGCP to exercise eminent domain over private property necessary for its transmission system. The law’s phrase “subject to the limitations and procedures prescribed by law” includes the limitation under jurisprudence that property for public use cannot be expropriated by a delegate. The Court found no express grant in R.A. No. 9511 allowing NGCP to expropriate property already devoted to public use. Therefore, NGCP’s delegated power is limited to expropriating private property.
* Nature of the Subject Property: The Court emphasized that the property is not private property of PAFC but remains property of public dominion, based on the laws governing the Petrochemical Industrial Park. P.D. No. 949 transferred “administration, management, and ownership” to PNOC, and subsequently to PAFC, but this ownership is in trust for the purpose of managing and developing the industrial zone for the national interest. The property is intended for public service and falls under Article 420(1) of the Civil Code as property of public dominion. As such, it is outside the commerce of man and cannot be alienated or encumbered, nor can it be the object of acquisitive prescription. It cannot be considered “private property” subject to NGCP’s expropriation power.
* Conclusion: Since the subject property is property of public dominion devoted for public use, and NGCP’s franchise does not expressly authorize expropriation of such property, NGCP has no lawful right to expropriate it. The RTC erred in issuing the Order of Expropriation.